Bulls Control the Tape
by Jerome "Mel" Hickerson
Note: Abbreviated report tonight due to the webinar that was held to explain some of Marketspath’s methods and approaches to trading.
Overnight, European markets pretty much ignored the Greece downgrade as well as disappointing German reports as traders focused on the fact that both Spain and Belgium were able to successfully raise money in the open market. On the economic front, the government reported that Import Prices for the month of May fell by -0.6%, which was actually less than the consensus for a decline of -1.2%. In addition, the Empire Manufacturing Index for June was reported at 19.57, which was below the consensus expectations for a reading of 20.00. U.S.futures pointed to a moderately strong open.
The session opened with a quick eight point move upward, and then continued to climb several more points before 10amprior to taking a four point breather. But pullbacks were scarce and weak as the bulls ruled the tape today. This turned out to be a classic trend day upward with pullbacks being on the order of a couple points; successful trades were on the long side.
We remain bullish for the intermediate-term but things have reached the point where a pullback seems more likely than not. If we’re going to remain range bound, the time for the pullback is here and now.
From a technical viewpoint, the SPX has closed above the 10 DMA, the 20 DMA, and now above the 200 DMA. Next are the 150 DMA (1126), the 100 DMA (1132), and the 50 DMA (1143). Breadth remains highly positive so it would seem to me that any pullback here is likely to simply be consolidation rather than a large wave downward. For now, it would seem that the bulls have avoided the abyss.
SPX Summary for Tuesday, June 15, 2010
482 Advancers/12 Decliners
Today's SPX component winners and losers:
- Largest one day loser is BBY with -6.07%
- Largest three day loser is DHR with -48.33%
- Largest five day loser is GIS with -49.20%
- Largest ten day loser is DHR with -48.38%
- Largest one day winner is MSFT with 11.95%
- Largest three day winner is TER with 14.49%
- Largest five day winner is IP with 20.98%
- Largest ten day winner is SWN with 22.32%
*** SPX Technical Summary ***
The average 14 day RSI of all 500 components is 58.
The average five day momentum of all 500 components is 6.52.
39.80% of the SPX components are giving a crossover Buy signal; 18.20% of the SPX components are giving a Sell signal. This is a 2.2 to 1 ratio of Buy signals over Sell signals.
SPX component signal changes today (evidence of trend):
- From Sell to Neutral: 100 components.
- From Buy to Neutral: 1 component.
- From Neutral to Sell: 1 component.
- From Neutral to Buy: 89 components.
Notice that we have switched over to the Buy side on the signals. We have not been on the Buy side since April 30th.
The moving averages:
Close 1115.16
9 EMA 1094.48 Rising
5 DMA 1087.78 Rising
10 DMA 1081.75 Rising
20 DMA 1084.56 Falling
50 DMA 1143.35 Falling
100 DMA 1132.61 Falling
200 DMA 1108.66 Rising
10 Wk MA 1129.56 Rising
We begin to see more rising averages.
NYSE Summary
On the NYSE 3210 issues were traded with 2669 advancing issues and 466 retreating issues, a ratio of 5.73 to 1 advancing. There were 64 new highs and 4 new lows.
Advancing volume was higher at a ratio of 23.82 to 1. The closing TRIN was 0.24 and the final tick was 880.
Evidence of trend:
Relative to the previous 30 session average, volume was -26.28% below the average. Of the last 15 sessions 5 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 15 sessions ended on a positive tick, 8 of last 10.
The 5 day moving average of New Highs is 39 while the 5 day moving average of new lows is 18 and the 10 day moving average of Net Advancing is 650. The Net Advancing data indicates a bullish trend.
Remember: Breadth leads, indices follow. Today, the NYSE Advance/Decline line increased from 204022 to 206225. This 1.07% increase came while the SPX was gaining 2.29%. The 10 day moving ratio of positive volume is 1.46 and the 10 day moving Advance/Decline ratio is 1.53. The 10 day moving ratio of positive volume has trended 0.56 over the last three days and the 10 day moving Advance/Decline ratio has trended 0.48 over the last three days.
The NYSE Composite Index gained 2.52% today.
NYSE Statistics:
Absolute Breadth Index: 59.75 up from previous day of 56.33
Cumulative Volume Index: 51,687.95 up from previous day of 46,965.76
High Low Logic Index: 0.34 down from previous day of 0.38
McClellan Oscillator: 274.48 up from previous day of 171.08
McClellan 10 DMA: 12.07 up from previous day of (36.11)
McClellan Summation Index: (1,537.68) up from previous day of (1,812.16)
% Stocks Above 200 DMA: 61.14 up from previous day of 53.84
% Stocks Above 40 DMA: 42.10 up from previous day of 27.12
New High / New Low Ratio: 93.94 up from previous day of 93.65
26wk New High/Low Ratio: 88.91 up from previous day of 86.40
13wk New High/Low Ratio: 85.25 up from previous day of 81.67
4wk New High/Low Ratio: 91.98 up from previous day of 90.28
Cumulative 4-Week New Hi-Low: 436,225 up from previous day of 435,720
Nasdaq Adv/Decline: 1,512 up from previous day of 1,455
Russell 1000 Advance/ Decline Line: 2,498 up from previous day of 2,403
Russell 2000 Advance/ Decline Line: (1,789) up from previous day of (1,867)
Notes:
Absolute Breadth Index: Low numbers suggest a topping process and high numbers suggest a bottoming process.
Cumulative Volume Index: If this begins to trend down while the averages are trending up, it is a bearish sign. If this begins to trend up while the averages are trending down, it is a bullish sign.
High Low Logic Index: High readings are bearish; low readings are bullish.
McClellan Oscillator: -100 is oversold and +100 is overbought. Also watch for crosses above and below zero.
McClellan Summation Index: Interpreted as bullish or bearish when it crosses over the zero line.
Cumulative 4-Week New Hi-Low: The difference between the number of issues reaching new highs (during a 4-week period) and the number of issues reaching new lows (during the same 4-week period).
Wednesday, June 16
Economics
08:30 Housing Starts
08:30 Building Permits
08:30 PPI -0.4% cons.
08:30 Core PPI 0.1% cons.
09:15 Capacity Utilization 74.2% cons.
09:15 Industrial Production 0.7% cons.
10:30 Crude Inventories
04:00 Italy CPIA
05:00 Europe Union HICP
Earnings
Before: APP, CSIQ, FDX
After: IHS
Speeches
02:15 Charles Plosser
The government will release a report on housing starts and building permits before the market opens. Economists expect housing starts fell to an annual rate of 655,000 units in May from 672,000 the month before. Building permits are forecast to rise to an annual rate of 655,000 from 610,000. The producer price index, a measure of wholesale inflation, is expected to show prices fell 0.4% in May. Excluding volatile energy prices, producer prices likely rose 0.1%, according to estimates. A report on capacity utilization and industrial production comes out after the opening bell. The government's weekly oil inventory report also is due Wednesday morning. In corporate news, parcel delivery service FedEx is scheduled to report quarterly results in the morning. In the evening, Federal Reserve chairman Ben Bernanke will deliver a speech in New Yorkon proposed financial reform.
Mel’s Missives from the Matrix:
- Total tick for the day was 352,000 and the average tick for the day was 229. There were 243 ticks greater than 600 and 8 ticks more extreme than -600. There were 34 ticks greater than 1000 and no ticks more extreme than -1000. The tick action suggests institutional accumulation.
- The day's range was 24.38 points. The intraday trading range - 9:35to the close - was 19.7. The 5 DMA of daily range is 21.37.
- Evidence of the intraday trend: At 10amvolume was 82.86% of the 10 day average. By noonthe volume was 81.04% of the 10 day average, and by 2pmvolume was 85.3% of the 10 day average.
- The day's volume was 92.9% of the average daily volume for the last year. Volume was 87% of the last 10 day average and 107.2% of the previous day’s volume.
- Evidence of the intraday trend: The largest increase in relative volume came between 2:15and 2:30when relative volume increased 38.5% while the SPX was rising 0.11%. The largest drop in relative volume came between 2:30and 2:45when relative volume dropped -48.9% while the SPX was dropping -0.05%.
- 69% of the SPX stocks closed with two day RSI above 90. 85% closed with RSI above 80. 1% closed with RSI below 20 and 0% closed with RSI below 10.
- 97.2% of the SPX are above their five day moving average, 95.8% are above their 10 day average, 86.8% are above their 20 day moving average, 37.6% are above their 50 day moving average, and 49% are above their 100 day moving average.
- 64% of the SPX closed above their most recent previous high.
- 2% of the SPX stocks closed below their most recent previous lows.
- 482 SPX issues advanced and 12 issues declined, a net SPX advance/decline of 470.
- Evidence of the intraday trend: At 10am, 67.8% of the SPX components were in the top half of the range. By noon, 73.2% were in the top half of the range, and by 2pm, 88% were in the top half of the range.
- 96.6% of stocks closed in the top half of the day's range. (3.2% closed in bottom half.)
- 70% of stocks closed in the top 10% of the day's range. 86.4% of stocks closed in the top 20% of the day's range.
- 0.2% of stocks closed in the bottom 10% of the day's range. 1.2% of stocks closed in the bottom 20% of the day's range.
- 9.2% of stocks closed within 2% of their 52 week high. 19% of stocks closed within 5% of their 52 week high.
- 57.6% of stocks closed within 50% of their 52 week low. 26.4% of stocks closed within 25% of their 52 week low.
- 68.4% of stocks closed within ¼% of their high for the day.
- 0.8% of stocks closed within ¼% of their low for the day.
- Evidence of the intraday trend: At 10am, 93% of the SPX components were up since the open. By noon, 91.4% were up since the open, and by 2pm, 94% were up since the open.
- 96.8% of the SPX closed up from the previous close; 94.2% closed higher than the open.
- Sectors stronger than the SPX for Tuesday:
- Basic Materials -- Outperformed the SPX by +11%.
- Energy -- Outperformed the SPX by +55%.
- Industrials -- Outperformed the SPX by +89%.
- Technology -- Outperformed the SPX by +36%.
- Consumer Discretionary -- Outperformed the SPX by +3%.
- Sectors weaker than the SPX for Tuesday:
- Financials -- Underperformed the SPX by -7%.
- Consumer Staples -- Underperformed the SPX by -133%.
- Utilities -- Underperformed the SPX by -41%.
- Health Care -- Underperformed the SPX by -64%.
- The $SOX index strength was stronger relative to the SPX Tuesday by 3.15%.
- The XLF underperformed the SPX by -0.07% Tuesday.
- The 2 Day RSI of the SPX is 94. The Dow RSI is 93, the NASDAQ is 96 and the Russell is 97.
- Over the last four sessions, the average session closed 73.51% of the range above the low. Tuesday closed at 97.8% of the daily range.
- Upside momentum moved upward Tuesday, from Monday’s 4.75 to today’s 6.52. The ratio of SPX components giving a crossover sell signal compared to buy signals moved positively to B 2.19 to 1.
- The ISEE Equity 10 day moving average Tuesday was 141.7. The lowest 10 day average in the last 52 weeks was 136.6 on 06/14/10and the highest 10 day average in the last 52 weeks was 249.3 on 04/15/10.
- 177 SPX components moved upward and 194 components downward during the after hours with 155 million shares traded.
Trade 'em well on Wednesday everyone!
-Mel
